RYAN CHIGOCHE
Shares in Zimbabwe’s leading roofing and building materials manufacturer, Turnall Holdings Limited, have been buzzing in the past four weeks, soaring 12.4% to ZWL$4.61 this week from ZWL$4.10 last month after large volumes of its shares exchanged hands via a block deal, Business Times can report.
The on-going bear run on the ZSE saw stocks on the local bourse shedding ZWL$371 bn in the month of July.
But, a block deal, which happens when two parties agree to buy or sell large volumes of shares at an agreed price among themselves, saw Turnall stock hitting an all-time high.
For a transaction to be considered a block , a single investor has to purchase a minimum of 5% of shares in issue.
Such deals are usually negotiated before execution.
The block deal first took place in June this year when Zimbrands acquired 32.55% of Turnall shares in the biggest block deal in the past few months.
This was followed up by additional acquisition of 10% last week , with Zimbrands taking control of the business with 42% shareholding in Turnall..
To consolidate its shareholding, Zimbrands this week offered to buyout minority shareholders in Turnall at ZWL$4.57 per share.
The offer will expire on September 5, 2022.
In the event that the majority shareholder, Zimbrands, increased its shareholding through minority buyout to more than 70% , Turnall could delist from the ZSE, as it would not be compliant with the listing rules 4.22 and 4.25 (d) that stipulate any company would delist if its free-floating shares at less than 30%.
“What it means is that the investor is coming in with block points. If the minority shareholders accept the offer from Zimbrands, then Turnall will be delisted from the ZSE,” an investment manager, who requested anonymity told Business Times this week.
“The investor (Zimbrands) is coming in so that it will raise capital for Turnall ‘s expansion plans.
Turnall has been looking at various options to raise capital. If there is a strategic investor that can put money, it’s a good thing for Turnall from a capital raising point of view,” Morgan & Co head of research, Batanai Matsika told Business Times.
Zimbrands executive director Ameer Kurawley said the decision to acquire a controlling share in the company was driven by the desire to unlock its potential in the industry with the main strategy focused on tapping into the opportunities in the infrastructure development space.
”The decision to acquire a controlling block was driven by the need to operationally diversify its operations and unlock the potential in Turnall as an established brand in Zimbabwe construction and building materials industry,” Kurawley said.
”Zimbrands intends to recapitalise the business in order to take advantage of the growing number of infrastructure projects in Zimbabwe and the region as well as upgrading its operations to global standards. This includes reconfiguring its operations to meet the growing demand for new products such as lighter roofing material,” he added.
Going forward, Kurawley said Zimbrands will be supporting Turnall’s operating efficiencies
